Group presentation
September 29th, 2015
Martine Odillard, Chief Executive Officer
Rémy Husson, Chief Financial Officer
Cédric Ratouis, Investor Relations
Agenda
2
1. Group profile
2. Businesses
3. 2015 First-Half Financial Review
4. Outlook
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Appendices
Group presentation – September 29th, 2015
1. Group profile
3
Chargeurs today
4
} A global manufacturing and services group} More than 90 % of sales outside France
} 1,600 people in 32 countries on 5 continents
} 11 industrial sites in6 countries on 4 continents
} 4 operating segments with leading positionsProtective FilmsTemporary protection of surfaces
Technical SubstratesFunctionalization of technical substrates
InterliningInterlining for clothing
WoolTop making and combed wool sales
Group presentation – September 29th, 2015
Key dates in Chargeurs history} 1872 Creation of Compagnie des
Chargeurs Réunis (navigation)
} 1980 Acquisition by Jérôme Seydoux- cruises (Paquet)- airline business (UTA)- overlanf transportation (Causse-Walon)
} 1925 Creation of textile group Pricel-
} 1976 Acquisition by Jérôme Seydoux- Dying- Interlining for clothing (Interlining, Fashion)- Cleaning products (Spontex)- Adhesive films (Novacel)
5
} 1981 Merger of Pricel with Chargeurs Réunis46% air transportation, 30% sea and overland transportation, 24% other industrial operations
} 1981 Transformation of Chargeurs Réunis in Chargeurs with two businessesto - Media: Television (BSkyB, CanalSatellite), movie (Pathé), print media operations (Libération) ;
1995 - Textiles / Manufacturing: wool, fashion, interlining, protective films, transport (Walon).
} 1996 Demerger into two companies : « Pathé » and « Chargeurs »
} 1996 Refocus of Chargeurs business base and globalizationto - In 2001, acting in concert with Jérôme Seydoux, Eduardo Malone increase its equity stake in Chargeurs.
2007 (Eduardo Malone joined Pricel in 1973 and is appointed CEO of Chargeurs Réunis in 1985.)
} 2008 Global Financial and Economic crisisto - Sale of « Fashion » business.
2010 Refinancing protocol (€ 80 M), issue of bonds convertible into shares (€ 23 M)
Group presentation – September 29th, 2015
A successful transformation between 2010 and 2014
6
} Strategic priorities of the transformation} Group strong deleveraging
} Improvement of the profitability on capital employed
} Return to profitable growth
} Implementation} Funding and cash management
} Extension of ST facility of banking protocol & diversification of international financing sources} Decrease of the WCR ] Protocol exit by anticipation : Protective Films in December 2013, Interlining in June 2014
} Profitability of the capital employed
} Interlining : Disposal of non strategic assets and withdraw from a non-profitable business} Wool : transformation of the business model with assets owned in partnership in 2012 and 2013
} Profitable growth} Protective Films : innovation (fiber laser) & focus on value-added products and services} Technical Substrates : € 8M investment for digital printing
} 2015 : Dividend payment for 2014 (last dividend payment was in 2008)
Group presentation – September 29th, 2015
A successful transformation between 2010 and 2014 : figures
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} 2012 and 2013, decrease of therevenue: new equity method for woolpartnerships
} 2012, restructuring in wool andinterlining businesses
} 2012, depreciation of differed taxassets
} Improvement of cash flow generation } Protocol repaid in June 2014} Deleveraging targets achieved
} H1 2014, introduction of a « recurringoperating profit » in the consolidatedincome statement to provide a betterview of the recurring performance
Group presentation – September 29th, 2015
2. Businesses
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Serving 4 markets:
Building Industrial Prod.
Automobile Electronic
A leader with an innovative positioning
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} Expert in manufacturing self-adhesive films fortemporary protection of fragile surfaces during allthe industrial process
} A global leadership} 93 % of sales outside France} 520 people in 16 countries} 3 production units: France, Italy and the United States} Sales representatives in more than 60 countries
} In 2014, innovation strategy permitted revenue growth tooutperform the market:} Products less than 5 years old account for nearly a third of the
revenue stream} Half of these new products concern innovative flagship products} The rest ongoing enhancements and improvements in performance
and processes} Around twenty new articles were brought to market
Group presentation – September 29th, 2015
A dynamic to improve financial results
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Source Eurostat – June 2015
Polyethylene prices evolution
Production in the building sector
1643
600
800
1000
1200
1400
1600
1800Prix €/tonne
1 600
740
1 280
1 385
1 620
1 220
1 550
1 743
1 145
Source: Platts – August 21, 2015
Group presentation – September 29th, 2015
Scenevent} Coated textiles with technical
applications for creative spaces} New business
Saflex } Protection clothing sold on French
market} High reputation for almost 10 years
A very promising new segment
Decoprint} Digital printing substrates destined to
advertising promising market} Perfect technological competence and
significant global growth potential
Senfa } Substrates for home furnishings} Integrating various simultaneous or
independent functions(ex: Thermal, Acoustic, blackout substrates)
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} Chargeurs Technical Substrates leverages the ability of coatings to develop innovations that open newfields of application. It helped to generate new growth in sales and profitability in 2014.
} In 2016, this strategic pathway will be supported by the starting up of a new 5 meters width productionline, coming on stream at the end of 2015.
} 4 businesses in functionalization of technical substrates:
Group presentation – September 29th, 2015
Strong growth expected in 2015 and 2016
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According to the World Textile InformationNetwork (Wint), global production expansionof digital printed textile substrates reached 24%in 2014. In 2015, it should remain a double-digit growth.
Source:http://www.lemoci.com/textilemarche-mondial-limpression-numerique-file-a-toute-allure/
DECOPRINT won the prestigious EDP AWARD(European Digital Press Association) in the «Best textile substrate » category with its newproduct AQUALIGHT, at the 2015 FESPA showin Cologne.
Group presentation – September 29th, 2015
A major player
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} Interlining expert: technical product, insertedbetween the fabric and the lining to keep garmentsflexible and help them to retain their shape
} A major player in the clothing market with a highlyglobalized organization having a commercial andindustrial network for local customers:} 89 % of sales outside France} 900 people in 24 countries} 8 production units on 3 continents
} In 2014, backed by a high-end market servingprestigious customers, Chargeurs Interliningconsolidated its profitability
} In 2015, drawing on its recognized know-how, thebusiness pursue the improvement of its profitability
Warping
Knitting
Retraction and Dyeing
Drying
Coating
Laboratory
Winding and Packing
“We manage the full production process”
Quality Control at each step
Computer AidedManufacturing
Vertical Integrated Production
Group presentation – September 29th, 2015
Resilience in a mature market
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Clothing consumption evolution(in % per year)
Source : IFM – march 2015
89,3
100
120
140
160
180
200
220
240
260
janv-09 janv-10 janv-11 janv-12 janv-13 janv-14 janv-15
171,1
256256
167
Juil-15
Polyester pricesWeighted average Polyester Staple fibre prices
Source: PCI Fibres, Fibre Organon, Woolmark Market Intelligence,Poimena Analysis, CIRFS. - Mise à jour: 31 juillet 2015
2009/2008
2010/2009
2011/2010
2012/2011
2013/2012
2014/2013
France -3,1% -0,3% -2,5% -2,1% -0,7% -0,9%Allemagne -1,0% 3,0% 0,0% -2,0% -2,0% -1,0%G.B. 0,8% 4,5% 2,0% 1,5% 1,5% 3,8%Italie -1,8% -1,6% -3,4% -5,0% -7,0% -3,5%Espagne -5,6% -2,3% -1,4% -5,8% -3,8% -2,5%
Etats-Unis -4,2% 4,9% 5,7% 6,4% 3,8% 2,2%
Chine 21,0% 24,8% 24,2% 17,8% 15,0% n/a
Group presentation – September 29th, 2015
} Expert of a key step in wool manufacturing chain
} « top maker » : creation of long, fine blended-wool fibers that successfully meet the needs ofspinning mills
} A global presence :} 100 % of sales outside France} With a light and worldwide structure} 4 industrial partnerships (United States, Argentina, Uruguay, China)
} Thanks to the deep transformation of the historical business model, Chargeurs Woolsignificantly reduced the risks related to the price volatility of its raw material
A transformed business model
15Group presentation – September 29th, 2015
« Wool risk » managed
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(*) 2012 and 2013, decrease of revenue : new equity method for wool partnerships
* *
Ratio Wool / Other textiles fibersEMI vs other fibres
Australian Wool prices (EMI – Weekly)
Group presentation – September 29th, 2015
3. 2015 First-Half Financial Review
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Key figures
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} Significant growth of the recurring operating profit
} Sharp rise of the attributable net profit
} A strong financial position
In € million H1 2015 H1 2014 Change
Revenue 256.6 243.9 5.2%
Recurring operating profit 15.6 12.0 30.0%
Operating profit 14.4 11.8 22.0%
Attributable net profit 8.0 6.4 25.0%
In € million June 30, 2015 Dec 31, 2014
Attributable equity 205.6 182.6
Cash position 9.8 9.3
Group presentation – September 29th, 2015
Change in Consolidated Revenue
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Revenue (in €m) - H1 2014 243.9
Volume impact (8.1)
Price & mix impact 2.8
Currency impact 18.0
Change 12.7
Revenue (in €m) - H1 2015 256.6
Group presentation – September 29th, 2015
Change in Operating Profit
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In € million Recurring operating
profit
Non recurring
items
Operating profit
H1 2014 12.0 (0.2) 11.8
Volume impact (3.0) - (3.0)
Price & mix impact 4.3 - 4.3
Currency impact 3.2 - 3.2
Fixed costs (0.9) - (0.9)
Non recurring items - (1.0) (1.0)
Change 3.6 (1.0) 2.6#REF!
H1 2015 15.6 (1.2) 14.4
Group presentation – September 29th, 2015
Consolidated Income Statement
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In € milllionH1 2015 H1 2014
Revenue 256.6 243.9
Recurring operating profit 15.6 12.0% revenue 6.1% 4.9%
Non recurring items (1.2) (0.2)
Operating profit 14.4 11.8% revenue 5.6% 4.8%
Finance costs & other financial income and expense, net (2.4) (2.9)
Income tax expense 6.8 (2.3)
Profit/(loss) of associates & non-consolidated interests (10.8) (0.2)
Attributable net profit 8.0 6.4
Group presentation – September 29th, 2015
Analytical Consolidated Balance Sheet
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In € million June 30th, 2015 Dec 31st, 2014
Intangible assets 77.6 72.6
Property, plant and equipment 52.8 50.3
Inv. in associates and joint ventures 18.6 27.1
Non current assets and liabilities, net (0.2) (12.7)
Working capital 54.6 47.2
Total capital employed 203.4 184.5
Attributable equity (excluding non-controlling interests)
205.6 182.6
Convertible bonds 7.6 11.2
Cash position (9.8) (9.3)
Total financing 203.4 184.5
Group presentation – September 29th, 2015
Statement of Changes in Equity
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In € millionH1 2015 H1 2014
Equity at beginning of period 182.6 157.9
Attributable net profit 8.0 6.4
Translation reserve 10.7 0.2
Shares issued on bond conversions 4.0 2.5
Paid dividends (3.2) -
Actuarial gain and losses on post-employment benefit obligations 1.0 (1.3)
Other 2.5 (0.2)
Change for the period 23.0 7.6
Equity at end of period 205.6 165.5
Group presentation – September 29th, 2015
Cash Flow Statement
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In € million H1 2015 H1 2014
Debt/(cash) at beginning of period (9.3) (3.2)
Debt/(cash) at end of period (9.8) (0.2)
Change in debt (0.5) (3.0)
Cash flow from consolidated companies 15.5 12.2
Change in working capital (3.9) 0.5
Net cash from operating activities 11.6 12.7
Net cash related to investment activities (6.8) (15.4)
Net cash related to financing activities (1.0) -
Net cash from capital transactions (3.2) -
Currency impact (0.1) (0.3)
Cash flow 0.5 (3.0)
Group presentation – September 29th, 2015
4. Outlook
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Profitable growth acceleration
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1. Very good 2015 first-half semester
2. Pursuit of a profitable growth strategy based on a policy of innovation and the development of high value-added products
3. Start of a new production line (Chargeurs Technical Substrates), the full effect of which will be felt on 2016 results
è Renewed trust in achieving the target at the end of 2015 : current operating income of at least €26 million
Group presentation – September 29th, 2015
Appendices
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Share FR0000130692 (CRI)
Market capitalization as of 2015/09/25: € 179 M
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Convertible Bond FR0010870931 (YCRI) 4415 083 convertible bonds were issued in March 2010 for € 22,8 M
4 5 557 convertible bonds were outstanding at August 31, 2015 representing, if converted, 177 824 shares] maximum number of shares that may be potentially issuable at January 01, 2016 = 22 999 519
4Bonds that are not converted in 2015 will be redeemed at face value = 55€ plus a stock-based remuneration equal to6.06 shares per bond
Group presentation – September 29th, 2015
ContactsChargeurs112, avenue Kléber75 116 Paris - France Tel: +33 1 47 04 13 40Email: [email protected]
2015 Financial AgendaFinancial Information Third Quarter November 10
Investor Relations Cédric Ratouis
Financial Communications Pauline Bayec